For the first time, and j. P. Morgan strategists move up their prediction for subzero 10 year yields to 2021 year clueless, donald trump attacks jay powell saying the fed is holding the u. S. Back from big rewards and games, we will win, he says. Maersk ceo sounds a negative note on the Global Economy even as the Company Beats estimates on operating profits for the Second Quarter. Good morning and welcome to Bloomberg Markets european open. We are looking right now at a safe haven bid that continues across assets. To the levels we have previously seen. The japanese yen the past three days, it is that it is at 105. 97, but not at the levels on tuesday. This leads me to believe duration is what investors are looking at. Futures, a bit of a bouts in terms a bit of a bounce. The ftse futures are up a little more than 0. 25 . The u. S. Government bond market is sounding recession alarms. Risk year assets jeweled the 30 year bond yield to a record low inversion. U. S. Stocks suffered another yesterdays in session. Futures are pointing a little higher. Here is what guests on Bloomberg Television had to say about the Treasury Curve inversion. What is happening today is broader than just the fed. It is about weakening. Things are not as rosy anymore. We see slowdowns in major developed countries. , six you see once again weeks, eight weeks of inversion followed subsequently of the sayd curve, then i would this is a sign of recession. I am sure the fed is looking hard at stocks. Progrowth policies to lift structural impediments. That is unlikely to materialize. That is the big concern looking forward. Matt lets get into the markets mark cranfield, our strategist. It was like a shot heard around the world will be sell the yield adding insult and to injury when the 30 year dropped below 2 . What are you hearing . Grab it is almost a major for yield across the world, not just in the United States, it is reaching every corner. We are seeing it in asia where the singapore curve which rarely goes inverted is down to zero now. It will probably go inverted at any moment. You are seeing it in the demand for smaller bond market. Yesterday we saw the 10 year in malaysia where the demand was one of the highest we have seen in several years. The yields in malaysia are 100 basis points below where they were six months ago, and demand is increasing. They still have a 3 handle. It is spreading to every corner. Even taiwan had record low yields on the 10 years today. There is nowhere to escape from this amazing demand to capture it disappears into negative territory. It is very unsettling for investors everywhere. Equity markets have a little bit of a rebound during the day. T is a shaky atmosphere no one is certain where to go to next. People are looking to Central Banks to see if they can save the day, or add pressure. We will surely see several more before the end of the year. Matt what kind of responses are you getting to your mliv much of the day, how serious is the u. S. Curve inversion for assets . What are people saying about this recession indicator . Mark one of the things being discussed again, earlier in the year is about the steepening of the curve. Although the flattening even to the point of inversion tells you there is a high risk coming sometime in the next 18 months to two years, the real damage to economy and asset generally is when the curve starts to resteepen. That is on the Federal Reserve is more aggressively cutting rates. By then the gdp numbers are week, the economy is soft. It is probably too late to do anything about it. In the early stages of the inversion, or the flat curves, it is not so terrible for assets generally, but it will be by the time the fed tries to catch up. Is the fed already behind the curve . Is it too late to lower rates . That is something that will play out over the next few weeks. The bank of japan has meetings coming up soon, and they will be under a lot of pressure to lower Interest Rates. In an opinion piece today, it says this is more the duration rally than a safe haven bid in the 30 year. It says the tenure has not hit its record low yet. We have not seen the japanese yen go down to lows that it was at at the beginning of this week. What does that tell you . Partly with the yen, japan is starting to increase the outflows through the bond market. They are not hedging their currency in the way they have been in the past. There are times as japanese money flows out, they buy yen to protect appreciation further down the road. Unhedgeda lot of buying of foreign bonds from the japanese, that is helping keep the dollar yen rate relatively stable for now. That is not something that will last long, because the yen is sensitive as is the swiss franc to the big disruptions we get in financial markets. If we see a couple more days like we saw on wall street yesterday, the yen and swiss franc will depreciate, and that will cause problems for japanese investors. For now, they are holding back. They are on a 105 handle. It will not stay up there for much longer, you have the United States not keen on having the dollar as strong as it is. The dollar is remarkably strong. , moving partsgs at the moment, but it will be surprising if the yen does not have another burst of strength that will add pressure to japanese bonds and the local stock market, which is having a tough time. There are more repercussions to come. Very much, mark cranfield, bloomberg mliv strategist. You can join the debate on the question of the day. Onre should be legit debate this. How serious is the u. S. Yield curve inversion for assets . Is it really a reliable recession indicator . We got to us on your bloomberg terminal. Lets get the first word news from beijing. A great leader is how President Trump described president xi in a series of tweets last night. The u. S. President says his counterpart is a tough man, a good man in a tough business. He ended the post saying, personal meeting . He did not clarify if he was suggesting a summit. Thed the u. K. See government block a no deal brexit . That is a plan of Opposition Leader jeremy corbyn. He asked rival parties to support him to block Boris Johnsons plan for the u. K. Divorce from the eu. Successful, he would delay brexit and call a general election. And he is primus are has defended his controversial move to revoke kashmirs autonomy. It has only lead to terrorism and separatism. He says the recent moves will allow kashmir to play a meaningful role in ongoing the elements. A bloomberg scoop, hong kongs ongoing protests are making Companies Think again about fundraising in the city. Several Chinese Companies are reconsidering plans to ip. O. One company scrapped per limiter a plans because of the unrest and will look at a u. S. Listing. Global news, 24 hours a day on air and at tictoc on twitter, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you very much, Tom Mackenzie in beijing with your first word news. Up next, trade secrets, hedge funds offering a glimpse into the biggest Money Managers, what they are buying and selling. We will break those down next. Into work,e coming you can tune into Bloomberg Radio live on your mobile device anywhere in the world. If you are in the city, tune into dab digital radio. This is bloomberg. Matt welcome back to Bloomberg Markets european open. From theout 16 minutes start of cash Equities Trading across europe and the u. K. Futures are up a little bit. Yesterday was a down day to say the least in equities after the inversion in the u. K. And u. S. Yield curves. Hedge funds have released their filings for the Second Quarter, giving us a glimpse into the most secret Money Managers in the world are positioned. Tech stocks are the flavor of the day. Who is buying what . Kick it i want to off with Berkshire Hathaway. By the end of the june they had is really very tiny compared to what they have in apple, more than 49 billion. Warren buffett, the oracle of omaha is getting interest from the billionaire investor taking a stake in Berkshire Hathaway valued at 680 million. That is not expected to be active. Technology has been front and center on these filings. This is what is going on with uber technologies. A lot of hedge funds are hailing uber. These are the hedge funds that started from tiger management. 620 million, but we should 25 of itser lost value since its ipo in may, and the stock has been spending more time below the ipo price than about it. Matt thank you annmarie hordern. Now the Bloomberg Business flash. Management is waiting deeper into wall street that. Wall street debt. We are seeing the final moments. He for the debt bubble bursts it is pouring hundreds of millions of dollars into management to bundle corporate loans into clos. Largest ipo,ys the firm is missing out on the secondbiggest, wework. They have stepped back from a lesser role in the public offering. Rejectedfter wework the pitch to be the top underwriter. The lead role will be taken by j. P. Morgan. Softbank Division Fund has scored an unexpected win, gaining trust from investors for new investments. Debt is the biggest for a chinese financial, but analysts are looking at the company differently as it increasingly takes on the characteristics of an investment firm. That is your Bloomberg Business flash. Matt thank you very much, Tom Mackenzie in beijing. Deutsche Bank Chairman is looking for a successor. After more than seven years chairing the bank, he will hand over the baton when his term ends in 2022. He has been a controversial figure with investors resizing him for a series of unsuccessful turnarounds which led to speculation he may lose shareholder backing in may. He did hold through but saw his support all below 70 , which is bad for a german chairman. His legacy is likely to depend on his latest appointee, and the success of the largest restructuring in the banks history. Thats get more with our german banks reporter. My question is, does he make it to the end of his contract in 2022 . Obviously that is a question people are asking now. It is clear he is looking for a potential successor. It is easier to replace a chairman. Who would take it if he were to step down before his term ends. His attention is to serve it out, but once someone is there, it is easy to replace him. Matt what names are you hearing to replace him . For a long time, he was noting german media as the kingmaker, a very big deal after a storied sachs amongldman other places. Who can follow him . We do not have any names of potential successors. There is a new board member coming in, a wellknown former ubs banker who has the background. Byis the ceo of a bank owned the qataris who also own a stake in Deutsche Bank. He would not be able to succeed achleitner for the chairmanship. The new chair would need to be someone who speaks german, has a strong banking background, and has a connection at a level that achleitner has. Those are the qualifications that are looking for. Matt how do savings turnaround look like right now . Deutsche bank is not likely to get back to its former glory, the size it was when Paul Achleitner took over the chairmanship. That is absolutely true. I do not think when he , he washis term in 2012 to see Deutsche Bank grow as one of the global leading investment banks. That dream is over and it is cutting dramatically. It is one of the biggest Restructuring Program ever. The hope is to get the price back up and on a footing that shows he can lead a bank that is seen as stable, and not as fragile. Matt thank you very much, fantastic story there. We are minutes away from the open, nine minutes until the start. Here are stocks to watch. The shipping giant maersk beat estimates, but warns about uncertainty ahead. This is bloomberg. Matt six minutes away from the open. Your stocks to watch with annmarie hordern. With the windoff power company. E the wind turbine company will have a call down today about 2 , a miss on earnings and on a revenue front. They are narrowing their guidance for profit, that will hit the stock this morning. Matt what is the story with gb c . Raised its guidance. Business is something powering growth in this business. It is up about 18 in this period. The benefit is from the u. K. Retail business which has been hit by the governments reduction, it turns out the impact was not as bad as expected. What is happening is some people are substituting what they were putting into the machines overthecounter. We can expect a positive performance from gvc this morning. From maersk, heard what you think . A is a decent report that has solid beat on the ebit. Was their ability to deliver synergy earlier than expected on the container business. The Global Outlook remains uncertain, but the ceo said on bloomberg this morning it is a question of consumer demand. Things are looking relatively robust amma and that is what drives their business. Matt thank you very much. Appreciate your time to read you can get the latest stock story on your bloomberg terminal. You can get the first word news on the bloomberg mobile app. Coming up, the market open. Futures pointing higher. A little bit of a bounce after the drops yesterday. U. S. Futures pointing up. Could we get a bid for risk assets today after the yield curve inversion on the 30 year bond dropping to an alltime low yesterday . This is bloomberg. Matt a minute away from the open of cash Equities Trading. Lets look at the markets with annmarie hordern. Tomarie msci asiapacific the downside, we do have asian indices turning around. Were seeing money move into the yen, and safe haven assets as well as gold. Still trading above 1500 and out. Futures after yesterday, the stoxx 600 closed down more than 1. 5. Ftse futures are up. 0. 5 . Tures up we are seeing a bit of risk on. The market is just opening now in london this thursday morning. Lets look at how the equity markets are placing themselves. A of direction will come this afternoon when we get data out. Ibex opening higher, 0. 3 . Also to the upside this morning. Here is the currency market. Is bloomberg dollar index soft, we are seeing a stronger euro and british pound. We are seeing a risk on movement this morning. I want to see how technology perform and financials, as well as the auto sector. On the stoxx 600 they were the worst hit yesterday. It is a mixed picture across financials, as well as health care. Is, is this rally here to stay . If it is, what will lead it, safety or risk . Matt you were telling us about technology, a hot topic there. In terms of individual stocks stories, take a look at the winners versus lures, 375 gainers, 100 down. British american tobacco, bnp, but it is interesting to see the chip equipment makers up there at the top. As far as the losers, big stocks going ex dividend. Ex dividend. Hsbc ex dividend. Aviva and some others will be the big drag on the stoxx 600 today. Fromdoes not hold us back higher moves. European markets are gaining even after the 30 year treasuries in the u. S. Hit a record low dropping below 2 for the first time ever. We talked to a number of people on Bloomberg Television about this yesterday. Lets listen to what they had to say. We may end up in a situation where people read alarmist headlines, get concerned, stop spending, Company Stock investing, then we get a major slowdown. Elerian talking about his view on what happened. Joining us now is luke hickmore, investment director, Standard Life investments. What is your take on the bond apocalypse as it has been called today . The drop in a 30 or treasuries, and the inversion on the twotens. Luke i am not sure what you are calling it. I think you have to buy duration at the moment. It is about where you start, we started low and are running into this soft phase that can turn into a nasty recessionary phase in the next 18 months. Yields need to go lower. Rum where we started, the move from where we started, the move has been quick. Benefits from the steepening curve in the u. K. , but with flattening curves and europe with flattening curves, you have to stay with it. It mean a recession . Is it a deadlock we will see a recession in the next 18 when the yield curve inverts . Luke it certainly points to below trend growth, you have to see the u. S. Consumer crack. There has been to signs of that yet. Cheaper mortgages, they will get cheap soon. That will hold up Consumer Spending for a little while longer, but if you look at the s p 500, 40 of earnings are inside the u. S. It might feel like a recession for market pricing, but the actual economy in the u. S. Going into recession deals a long way off. Probably the cheaper rates come through and car loans as a longad you want to go duration, what are you stocking up on . U. S. 10,are along the the u. S. 30 we are long the u. S. 10, long the u. S. 30. This is a point where being Long Duration helps you offset some of the credit risk you need to take as well, so you get long credit approach. It feels that moves lower and probably that it has further to go, september or october when we get qe from the ecb that starts the paths. Starts the matt does that make up for negative yields . Do you own negative yielding debt if you are longer duration in europe . Is it more for Capital Appreciation than safe havens . Luke it is entirely, mostly Capital Appreciation with a little bit of protection against credit spreads. The longer we are in europe is futures. We do not have negative yielding fiscal bonds. That means we have managed to avoid it. The Capital Gains easily outweighs the concerns about the starting yield. It has been one of the worst things to judge where markets are going. Really bad indicator. Matt that is a good point. Nonetheless, negative yields make big headlines. We heard j. P. Morgan forecasting the u. S. Getting there sooner. Do you think we see a u. S. 10 year yield going to zero in the next couple of years . Luke i think it depends on september 1 and december 15, it is around tariffs and trade and trump. If the position of this 10 tariff on the 300 billion of goods, at that point the spike in yields, depending where we numberi have the 125 penciled in on the back of that move. If we are at that level, we could easily get lower. Zero is no longer a barrier in any bull market. Sayspends on what the fed and does, but it is hard to get there without seeing massive fed cuts. If we get the tariffs in december, i would look for two 50 basis point cut after that. If we do not get that move, it will look more modest and yields will settle down and we will be looking at the 2 area where we have an arrangement with china signed t. Matt what is your take on scott powells next move . President trump calls the fed chairman clueless. Luke we have been asking ourselves that question a couple days around where are the independent Central Banks left in the world . The fed has been harangued by donald trump. Seeing a change in governor in the u. K. , the ecb is changing under political pressure. It does not feel there is a lot of independence. Fed will stick to their meetings, but they are coming under a lot of pressure from the market and the president , which will lead to further cuts. Us, myou will stick with guest cohost for the hour, great day to have you here, luke hickmore, investment director, Standard Life investments. I want to give you a live shot of the Frankfurt Stock Exchange opening the dax this morning. We are 10 minutes into the session and we opened higher, but you can see that line heading down. Right now the german index is only up 0. 1 . Bounce, was a dead cat and the enthusiasm is already waning. Move, onetocks on the ,hich has enthusiasm not waning maersk rising after beating analyst estimates for a Second Quarter operating profit. We talked to the ceo to get more details on the outlook. This is bloomberg. Matt welcome back to Bloomberg Markets european open. , 12 minutese game into the session, the dax has turned negative and the ftse is off 18 point. Top individual stocks stories, we go to annmarie hordern. Gaining morersk is than 3 , this is a beat on earnings. Hey kept their guidance q spoke to the ceo, a downbeat tone he struck globally, and says he sees eight global slowdown throughout the year. Carlsberg is up. Craft beer sales earnings up 17 . A fullyear guidance upgrade is profitable for the company. 19 . Arbon down more than the ceo has resigned, they are talking about a restructuring. Their guidance for 2022 is no longer sustainable. Matt thank you very much for that. Attempts toestors shelter from a growing pool of negative yielding debt has gotten tougher. Is the First Company to have negative yield in 10 year bonds. Walmart are not far behind. This is a blow to Portfolio Managers who look at Corporate Bonds as an alternative to Government Debt unless they are going after it for the Capital Appreciation. Luke hickmore just wants to make more money, investment director, Standard Life investments. Are you in any of this . Does negative yield mean anything on the corporate level . Does it mean much on the government level . News on thesting corporate side. That nestle tenure negative is a big indicator where we could be going. As a sterling investor, buying eurobonds is a nice pickup because of the benefit of doing it. I could add 120 basis points on 20 year Corporate Bonds when i am looking at it in sterling terms. At the moment, the sterling market is so cheap there is no point. Saying all of that, if i was a corporate the moment, tenure debt in negative territory might. Oost my Free Cash Flow and actually may push yields backup from a supply perspective. It is august. They are on holiday in august in europe. So there is no indication the Corporate Bonds issue is going down that road, but once they come back in september we can expect a flood of issuance in the corporate on the market. Matt what does negative debt mean to you . Joe weisenthal tweeting a lot about negative debt and triggering a lot of reaction. Is it a bad thing . We were told it is dangerous longterm, what is your take . Luke for sure. It depends on where the real returns are being made. , a lot ofeal returns the market has been in negative returns for a long time versus inflation rate. If you are getting negative Interest Rate and start seeing lower inflation, that does not seem where we are going. I completely agree with the longterm misallocation. Boosting cash flows and receiving an interest benefit, that is not a particularly healthy place to be. M ae we will get a wave of that suggests you are doing it for the wrong reasons. You are being paid to borrow. That could be value destructive quickly. Matt what do you expect the ecb to do . A lot of talk about qe getting restarted. Will they make the problem worse . Luke yes, they are. This is why you need to be longduration, long credit for the next five to six months. Reasons no fundamental to be long that kind of risk in credit at the moment. You are getting toward the end of the period of growth, but the ecb will have your back, the bank of england will have your back in early november. Reopen thosewill programs of extraordinary stimulus. 9 billion a month in corporate buying out of the ecb quickly come september. Matt luke hickmore, investment director, Standard Life investments. Take a quick look at the sectors on the move. We are 18 minutes into the session, we have had a little bit of a turnaround as far as are concerned. Some falling into red, mostly little changed. Oil and gas and basic resources are the biggest losers. Back at have a lot to do with shell going ex dividend. Really defensive groups as well as technology after a rout yesterday. Up next, the loan hawk come on norways central bank is likely to leave its key rate as is. They may hike in september. More ongoing against the grain, next. This is bloomberg. Matt welcome back to Bloomberg Markets european open. 21 minutes into the trading day, on theking back to green dax, 25 basis points. The ftse is down 0. 1 . One of the last Interest Rate hawks could make a stand. It may well leave the door open for a hike in september. This makes norways central bank the lone hawk. A tough call to stick to a plan to raise again. In june they said it may warrant a hike, this would be a global wave of easing kicked off by the fed. They face increasing headwinds from abroad and are trying to squeak in a fourth increase. Y want an economy and the oil prices cooling Global Outlook could make policymakers worried. Economists say the risk related to the trade war and no deal brexit have reduced the probability of a september hike, bankhey say if the norges sends a clear signal of a hike, that would be recognizable monetary policy. You wantederything to know about the norwegian central bank. Us, luke ore is with tarif, investment director, stad life investments. How closely do you follow a bank in a country a 4 Million People . Luke honestly, not at all. You told me more than i knew five minutes ago. The point here, we saw the bank of England Holding out as a hawk through the spring and part of the summer before they realized the bacon was cooking and they and the u. K. Ll it, economy was facing the same problems as the rest of the world. I am guessing norway will go down that same road as well. It seems strange the any central banker around europe is thinking about rate hikes at the moment. We just hit a nasty patch economically. And are certainly in the early stages of a recession already. Lets get back to the u. K. Mark carney is one of the central bankers who wants to give the impression that he needs to raise rates or has been thinking about it. Yesterday we had a higher inflation print than anticipated in the u. K. And the yield curve inverted after that. What is going on with the bank of england . Luke i have not been a fan of mark carney for some while. The thing the bank needs to understand, anything they do to a degree, you have to look through these inflation blips which seen currency related. Inhave big changes coming up the u. K. Economy in the next few months that suggest you have to be standing ready to support with startinguts, qb again, and starting to talk about the practicalities around that, not even hinting that rate rises are on the card. They have got to be. Matt to be fair, carney has not had an easy time of it. The visibility in the u. K. Is incredibly low. It is a expect tired question what do you expect for brexit and the pound . Do we continue to fall further . Luke i think i am believing in a hard brexit more and more. The market certainly are, ever since we had new occupants at downing street. You see signs of this and cable rates, credit markets, through the twotens curve. All of which have changed direction significantly. All of it points to the market believing in new higher chances of a no deal brexit. In a way, this is what we needed to see happen if that is going to be the case. Apparent for that makes it less painful. It feels as though we have not years. Eparing for two lets see what it feels like afterward, but i think that is where we are heading, and it is getting harder to fight against it. Corbins move this morning does not move us closer to avoiding a hard deal brexit. A fantastic morning to have you booked with me. You are going to join me on radio. Grab a snack and a coffee, and we will see you on radio and a half hour. Luke hickmore, investment director, Standard Life investments. On dab tune in in London Digital radio, or around the world using your mobile device. This is bloomberg. Matt 30 minutes into the trading day, lets get your top headlines. Long bonds, small yields. The 30 year treasury drops. Jpmorgan moves the production prediction to 2021. Hong kong ipos are being rethought as protests rocked the city. Maerskgh seas ahead, jumps after beating on profit. The ceo sounds a negative note on the Global Economy. Way we have been expecting a slowdown all year, Global Demand has grown and we expect that to continue. Matt good morning, welcome to Bloomberg Markets. This is the european open. 30 minutes into the trading day, lets see how things are shaping up. Losses inen gains and terms of the indexes but we do see 356 up and 150 down. In any case, bap at the top, gaining 1. 8 . Nestle is defensive as well. And sap, tech stocks are rebounding today. Earnings, up with almost 5 . On the losing side, there are a lot of stocks going ex dividend today including Royal Dutch Shell from hsbc, and rbs. Vestus investors down, disappointing the market by moving and tightening their range to the downside. We will talk to the incoming ceo in just a few minutes. Lets get bloomberg first word news in beijing. Withe bond rally continues u. S. 30 year yields falling below 2 . Yesterday, the Treasury Curve inverted for the first time its the financial crisis. Since the financial crisis. Say of america strategists the s p 500 topped out anywhere from two months to two years after previous inversions. The wholeon, that is of negative yielding debt and it could get even bigger. Strategist sees yields getting pulled to zero, saying 10 year treasuries could hit that level by 2021 and that the u. S. May even join countries like japan and germany are going negative by going negative. Warren buffett has upped his share of amazon, raising his stake 11 . It is valued at more than 1 billion, but the stake in amazon is still much smaller than the holding in apple. Ackman has taken a big stake in Berkshire Hathaway. Fund took a Square Holding were 690 million when we are told the famous activist investors stake is not expected to be active. And a great leader, that is how President Trump described resident xi jinping in a series of tweets last night. He said his counterpart is a quote good man in a tough business. He ended by saying personal meeting . He did not clarify if he was suggesting a summit with xi jinping. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt . Matt thanks so much, Tom Mackenzie in beijing. Vestas is falling after reporting profits that missed forecast. Wind turbine revenue dropped. The danish manufacturer also narrowed its Earnings Guidance closer to the downside. Joining us is the new ceo of vestas vestas. Let me ask you why you are narrowing forecast to the downside forecasts to the downside. Is the outlook looking pessimistic . Good morning, and thank you. , we have improved visibility for the remainder therefore, year, and we are increasing the range and guidance on the top side and we are doing it at the lower part of the range. But that also comes on the back of q2, where we had a record or intake there we have had the best Service Quarter in the vestas. Of ve shape up to the fact that we are being challenged by tariffs and doing everything we can to mitigate. The fact is, they are still going up and still being introduced from various parts of the world. So that is the main reason for it. Tariffs and a production tax credit being phased out in the u. S. It is obviously an important market for you. How is that affecting your outlook and can you still be competitive with that double whammy . Double henrik that is a long question on a morning like this. Between be phased out 20 and 21. We are seeing an absolute positive in intakes and a busy period. Im sure it is far too early to say what that means. As a leader in the industry, we are seeing positives in mitigating the technology coming so no, thatt for has not gone any affect on what we said in this mornings revised guidance. I talked to another executive out of copenhagen a little earlier, he does not really see any incentive for the u. S. And china to come to the table and make a deal. You mentioned tariffs are a big headwind for you. How do you see the spying out in terms of the trade war . I will leave that to the two gentlemen who are discussing it. ,unning a Global Business here we have our eyes on how to mitigate that through the supply chain, and similarly, how can we source and reroute some of our supply gain from other parts . It will force and increased transportation cost, but at the same time, we are also very close to our customers. Of course, we will have a conversation with customers when we look into the future, how to carry and to mitigate some of these tariffs. Matt you mentioned the Service Business is doing well. In the past, you focused on Wind Turbines and made some smaller acquisitions in service and technology. I wonder how you feel about that strategy going forward. What does the company under your leadership look like . Henrik [laughter] thank you for that question on day 15. That is one of the strongest messages, and this is a succession between anderson and me, more of the same. We are fully aligned and endorsed in that one. We have done well, but we are also investing in the future. We are absolutely going for that leadership in this industry. Proven this industry has that we are able to compete with more of the Traditional Industries when we look in the years of 1890. We are sure about that positive and work hard. Matt one thing you have certainly been following them even before you moved into that office as ceo, is low Interest Rate environment. What do these incredibly low Interest Rates mean to you . Henrik it probably means there is a question mark to how the world will develop. The Positive Side is that it is a lot easier to finance new investments in a 0 Interest Rate environment for but at the same time, as we look around the world, we just said today we were investing more than 800 million euros. For of that is also driven investment in countries and committing yourself to renewable energy. That also drives some of the localization programs we see from these countries. Positive, but we are also keeping an eye on the underlying Interest Rates. Matt thank you for your time, i appreciate it. Ceo of vestas. , we will bring you some movers this morning. This swedish food retailer is soaring after beating estimates. This is bloomberg. Matt welcome back to Bloomberg Markets. We are 45 minutes into the trading day right now, looking at losses on the ftse down. 3 . Slight gains in germany, the dax is up almost. 2 and the cac gaining less than. 1 . Maersk reported profits that beat estimates, but it is warming about stormy seas ahead. The ceo told bloomberg Global Outlook remains uncertain. Batch of Global Outlook remains the Global Outlook remains uncertain. U. S. Imports grew 2. 5 . ,hey were way down from china but it has allowed us to manage the situation quite well. Looking forward, we also read the papers and hear the news and fore is lots of uncertainty trade tensions between china. Also, all kind of asset prices and fuel prices will drive down thats why we will reiterate our guidance for the year. View,from your point of do you see the u. S. And china needing to come to the table and make a deal . Right now, there is not much that suggests the eu will be done anytime soon. Said, for our decides, what really that is not tariffs. It is consumer and Consumer Spending. Tight salariesre are increasing. In confidence still remains relatively good. It iso have the fact that a relatively small share of the u. S. Consumer spending basket. It is less than 4 impacted at this part. Good. , so its anna its interesting you say that, because in the bond markets, we have seen a strong recessionary a big we are also seeing bid for long and rates. , arewhat you are saying you n particularly concerned about a global or u. S. Recession anytime soon. We have been expecting a slowdown all year. In february, we guided Global Demand and container shipping. In the expectation we would be seeing a slowdown in the Global Economy. Demand hasnt slowed so far and we expect that to continue for the rest of the year. Consistentowth is with a very slow growing economy, and that is what we are planning for. Matt that was the maersk ceo speaking to myself and nejra cehic. Lets go to annmarie hordern. Annmarie i see this swedish food retailer stopping topping the stops stoxx 600 as they beat the highest estimates. United internet provides services to homes and offices, they cut fullyear Sales Guidance for the year. Also to the downside, vestas, down nearly two and a half percent. They are narrowing guidance for the year. We just spoke to the ceo, its interesting what he had to say about the trade war. Know that these Turbine Companies are having to pay higher for these wrong raw materials. Matt it is interesting to see these earnings out today from v estas and maersk. Thank you for that. Banks have announced almost 50,000 job cuts this year as the outlook for the economy and the industry since. Nowhere was that more pronounced than here in europe. Lenders are bracing for a continuation against the negative Interest Rates that have been eating into profits. They dont make life easy for us. It does represent revenue pressure for us and all of the banks. It is clear the negative rates have a negative impact on revenues and net interest income. The inversion we had for some time is not helpful for our business. We now have to assume that rates will stay lower for a longer period than expected. That is why we are very focused on mitigating actions. That impacts the ability to invest. Consolidation would be a very natural. When you see in these activities and with low Interest Rates, you assume there would be a pickup in activity and equities. It is a significant risk in something we are managing wherever we can. Clearly, the environment is not helpful for banks. The Interest Rate is not positive. People can move into wealth management. Joining us is bloombergs managing editor for bloomberg finance. Why are europes banks suffering much more than the u. S. Counterparts . When i was listening to the clip, the thing that struck me chief is the ubs talking about the mitigating steps banks have to take. One thing, banks are more thing banks one are more vulnerable to be prolonged Interest Rate environment they have been in, combined with the fact that Capital Markets are not as the. As deep. We have a peace out today about europes ailing banks and why that should worry policymakers. One of the things is that takes in europe just dont have the kind of Capital Markets that their counterparts in the u. S. Have access to. Matt the flip side of the how vulnerable are banks to the european economies . How vulnerable are the economies to the state of banks right now . That is a great question. This is just at the interdependence of the economy and the banks. It has really created a cycle that is not helpful for either. The Corporate Funding sources for major corporations are very limited. In the u. S. , you have a very developed bond market. , what they find is that a majority of Corporate Lending comes from the banks. This is not something that is very healthy as he saw in the case of the 2008 financial crisis. European banks with the first to move back from lending. There was a debt flow to the wider economy, if there is another crisis, for instance, that engulfed the regions banks , they will immediately move back from risktaking in a way that will filter through to the rest of the economy. Matt great having you this morning, fantastic reporting. Bloombergs managing editor for European Finance and investing. Up next, chinese Companies Think about ipoing in hong kong, or maybe not after protests. We look at alibabas plan next. This is bloomberg. Matt welcome back to Bloomberg Markets. The european open, 55 minutes into the trading session. We are looking at red arrows, with the exception of the dax. Ftse is down. 3 . Lets move to hong kong. The protests have unsettled corporate confidence. Senior bankers say companies are scrapping plans ipo, choosing to list in the u. S. Instead. One Chinese Company on our radar is alibaba, said to have filed for a hong kong listing. The deal would be hong kongs largest sale since 2010 but it is unclear if the ipo will go ahead. Joining us to discuss is bloombergs correspondent. Our company reconsidering their appetite for ipos in hong kong . Thats a great question. We are definitely keeping an eye on alibaba and its plans for a potential massive share sale in hong kong. It, we have seen a bunch of Chinese Companies rethinking their approach to potential ipos in hong kong on the back of protests. Not just the protests, but the whole volatility in the markets. Alibaba, we will have to wait and see how results come out and how investors react. We are talking about a very solid company. Whenever it comes, a big one to watch. Matt man u well, thank you very much manuel, thank you very much. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you preorder a new samsung note. Click, call or visit a store today. Francine bond is a flash recession, treasury yields hit an alltime low as curves invert. Is the Global Economy headed for a serious downturn . Attacks jay powell and says the central bank is holding the u. S. Back from big rewards. Maersk sores, reassuring , reassuring investors despite an uncertain trade environment. Good morning, everyone